Third regional growth fund formed after North Jeolla Province and Ulsan
Sub-fund investment program to begin late this month; central region investment center to open by year-end
A 54 billion won ($39.8 million) Daejeon D-Growth Fund targeting venture companies and startups in the Daejeon region has been launched, with plans to raise a total of 80 billion won in venture funds through a sub-fund investment program.
The Ministry of SMEs and Startups said it held a fund formation ceremony Thursday at the Daejeon Startup Park headquarters.
The Daejeon D-Growth Fund is the third regional growth fund to be formed, following those in North Jeolla Province and Ulsan. The Korea Fund of Funds contributed 35 billion won, with the remaining capital coming from the Daejeon city government, Daejeon Investment Finance, KAIST, Industrial Bank of Korea, Hana Bank, NH NongHyup Bank, Haengbok Energy and GN Soft — a mix of local companies, financial institutions and a university. The mother fund totals 54 billion won.
Regional growth funds are structured so that local governments, regional financial institutions, companies and universities pool capital alongside the government's Korea Fund of Funds to invest in local ventures and startups. The government aims to build a venture investment ecosystem that allows promising regional companies to attract investment and grow without relocating to the greater Seoul area.
Daejeon has recently emerged as a leader in venture investment outside the greater Seoul area. According to the Ministry of SMEs and Startups, venture investment in Daejeon reached 435.9 billion won in the first half of this year, a 144.9 percent increase from 178 billion won in the same period last year — the largest figure among all non-metropolitan regions. The surge was attributed to large-scale investments in emerging industries such as life sciences and aerospace, driven by the region's research and development infrastructure centered on the Daedeok Innopolis.
The Daejeon D-Growth Fund will determine its investment focus areas through a management committee comprising Korea Venture Investment, the local government and key contributors. A sub-fund investment program is set to launch late this month, with the goal of raising approximately 80 billion won in venture funds.
Daejeon is also set to establish a startup city-specific fund to nurture KAIST-centered startups, following the city's selection in April for the government's "startup city development project."
Regional growth fund formation is expanding to other areas as well. North Jeolla Province and Ulsan, where mother funds were established earlier, will announce their sub-fund investment programs late this month. The Daegyeong region and the southwestern region are each set to form their mother funds late this month and in early November, respectively, with sub-fund investment programs to be announced by year-end.
Korea Venture Investment also plans to open a central region investment center by year-end to help invigorate the local venture investment ecosystem. The center will be based in Daejeon and will manage regional growth funds for the central region while improving investment accessibility for local companies.
Mok Seung-hwan, director general for startup and venture innovation at the Ministry of SMEs and Startups, said Daejeon is "a leading science and technology innovation hub in Korea, with outstanding research institutions concentrated around the Daedeok Innopolis." He added that the ministry would "actively support Daejeon's science and technology capabilities so they can give rise to deep tech unicorn companies" through the Daejeon D-Growth Fund.
boo@heraldcorp.com
